Salik Company PJSC, Dubai’s exclusive toll gate operator, has announced the combined valuation of the two new toll gates at Business Bay and Al Safa South.
The two new gates have been valued at a total of AED2.734 billion ($744.37 million), with the Business Bay Gate valued at AED2.265 billion and the Al Safa South Gate valued at AED469 million.
Salik gates to be operational by November-end
The new gates are expected to be operational by the end of November 2024. The two new gates at Business Bay Crossing on Al Khail Road and Al Safa South on Sheikh Zayed Road, positioned between Al Meydan Street and Umm Al Sheif Street, will expand Salik’s toll gate network in Dubai from eight to 10.
These additions aim to optimize traffic flow by redirecting vehicles to routes with higher capacity, thereby alleviating congestion. RTA has conducted detailed traffic impact studies to ensure that the placement of each gate aligns with its strategic goals for traffic management optimization.
As per a concession agreement with the RTA, Salik has the exclusive rights to construct, operate, and maintain the toll gates until end of June 2071.
“The launch of the two new gates highlights the commitment of both the Roads and Transportation Authority and Salik Company to advancing sustainable mobility solutions and improving Dubai’s transport infrastructure. These strategic investments underscore our dedication to sustainable growth and providing more seamless mobility across Dubai by enhancing travel efficiency and reducing traffic congestion. The new gates will play a crucial role in optimizing travel time and reducing congestion on some of Dubai’s busiest routes,” Mattar Al Tayer, Chairman of the Board of Directors of Salik, said.
“We are extremely pleased with the progress we are making on our long-term objectives, in line with our ambition to become a global leader in mobility solutions. We are thriving in the tolling business and remain focused on strengthening our core business offering as we expand our footprint within Dubai,” added Ibrahim Sultan Al Haddad, CEO of Salik.
Valuation approved
Salik’s board has approved the valuation of the two new gates. It is worth noting that the differences between the valuation by Salik and the valuation by the RTA did not exceed 5 percent.
Regarding the payment schedule for the gate’s valuation, an agreement has been reached with the RTA on a repayment plan for the total valuation amount for the two new gates over a period of six years starting from the end of November 2024.
The annual instalment will be AED455.7 million, to be paid in two equal instalments of AED227.9 million each, every six months, which will be provided from the company’s own financial resources.
Expected financial impact
Salik expects to see an increase in annual revenue-generating trips with the operation of the Business Bay and Al Safa South gates supported by the positive macro-economic factors in Dubai. Upon their operational launch, which is expected to be by the end of November 2024, the new gates are expected to generate a revenue impact from the starting date till the end of the year 2024.
In light of the new gates, revenue-generating trips are now expected to increase in the range of 7-8 percent for 2024 versus previous guidance of 4-6 percent, with a robust EBITDA margin of 67-68 percent, versus previous guidance of 65-66 percent.
For more news on economy, click here.
